LAVAL, Quebec and RALEIGH, N.C.— Valeant Pharmaceuticals International, Inc. (NYSE: VRX) and Salix Pharmaceuticals, Ltd. (NASDAQ: SLXP) announced on March 22 that they have entered into a definitive agreement under which Valeant will acquire all of the outstanding common stock of Salix for $158.00 per share in cash, or a total enterprise value of approximately $14.5 billion. The transaction was approved by the boards of directors of both companies and is expected to close in the second quarter of 2015, subject to customary closing conditions and regulatory approval, according to a joint statement issued by Valeant and Salix.

Salix Pharmaceuticals is a widely recognized gastrointestinal market leader with a portfolio of 22 total products, including well-known prescription brands Xifaxan, Uceris, Relistor, and Apriso, as well as a strong near- term pipeline of innovative, new assets.

"Salix's market-leading gastrointestinal franchise is an ideal strategic fit for Valeant's diversified portfolio of specialty products," said J. Michael Pearson, Valeant's chairman and CEO. "The growing GI market has attractive fundamentals, and Salix has a portfolio of terrific products that are outpacing the market in terms of volume growth and a promising near-term pipeline of innovative products. With strong brand recognition among specialist GI prescribers, a highly rated specialty sales force, and a significant product and commercial presence across the undertreated and underserved gastrointestinal market, this acquisition offers a compelling opportunity for Valeant to create a strong platform for growth and business development."

Thomas W. D'Alonzo, chairman of the board and acting CEO of Salix, stated, "We are pleased to have reached an agreement with Valeant, which is a logical partner and importantly, creates immediate value for our shareholders. Combining Salix's leading market position in gastroenterology with Valeant's scale and resources will create a stronger and more diverse business committed to providing better health solutions to health care providers and their patients.

“We are proud of the accomplishments of our Salix team. Together, we have built our company into the leading gastrointestinal specialty pharmaceutical company, providing solutions for patients and health care providers. We look forward to working with the Valeant team to ensure a smooth transition," he said.

The combination is expected to yield greater than $500 million in annual cost savings from the cost base of the combined company, according to the statement issued by Valeant and Salix. Synergies are expected to be achieved within six months of close, primarily from reductions in corporate overhead and R&D rationalization, with the cost to achieve these synergies to be approximately 65 percent.

Valeant and Salix said they will determine how best to integrate the two companies to leverage the combined strengths of both while ensuring a smooth and orderly transition. Consistent with Valeant's approach to integrating Bausch + Lomb, there are no planned reductions to Salix's highly rated specialty sales forces or hospital, key account and field reimbursement teams and Valeant said it will determine the optimal size of the primary care sales force through the integration process.